Gold price retreats from two-week high as oil nears $100, silver down 4%

AI desk brief

Gold and silver sold off sharply as the Middle East escalation pushed oil toward $100/bbl and revived fears that the Fed could resume hiking rates as soon as next week. August COMEX gold dropped as much as 2.6% to $4,042.50/oz and was last around $4,050.80, down 2.4%, reversing two sessions of dip-buying that had lifted the metal to a two-week high of $4,165.87 on Wednesday. Silver was hit harder, falling as much as 4.9% to $57.32/oz and trading near $57.82, down 4.1%.

The move was driven by higher energy prices, firmer two-year Treasury yields, and a repricing of Fed policy expectations. Rate swaps now imply roughly a one-in-three chance of a hike at next week’s meeting, with a September increase fully priced, according to Bloomberg. TD Securities’ Bart Melek said the bounce looked like short covering and technical dip-buying rather than fresh long accumulation, adding that gold could retreat toward support around $3,900/oz, with resistance seen near $4,200.

Near term, the key risk for metals is whether crude’s rally and bond-market selloff keep real yields rising, which would pressure non-yielding assets. Gold remains above the psychologically important $4,000 level, but a break lower would expose the market to another round of liquidation after the recent run-down from February’s post-strike highs. Silver remains more volatile and is still about a third below its January peak, so any sustained move in gold lower is likely to drag silver and miners further.